Ok great that Answers my question and I confirmed on 590-B:
Medical insurance. Even if you are under age 59/2, "you
may not have to pay the 10% additional tax on distributions
during the year that are not more than the amount
you paid during the year for medical insurance for yourself,
your spouse, and your dependents." You will not have
to pay the tax on these amounts if all of the following conditions
apply.
You lost your job.
You received unemployment compensation paid under
any federal or state law for 12 consecutive weeks
because you lost your job.
You receive the distributions during either the year
you received the unemployment compensation or the
following year.
You receive the distributions no later than 60 days after
you have been reemployed.
